Is the Welsh Government awash with unspent funds for business?

There are tens of millions of funds for economic development and business support that are available but which do not seem to be channelled through to the Welsh economy – and it doesn’t appear to be the WG’s fault! Apparantly, they are ‘bending over backward’ to do their bit. The days of ‘gold-plating’ are over it is claimed and, in fairness, there is some evidence for this.

Alot of this EU Convergance and UK grant finance is still not reaching the ‘real’ Welsh economy and private sector in spite of almost desperate measures such as:

• huge reductions in the time taken for approval of grant applications (down in most cases to less than 2 weeks)
• huge reductions in paperwork and red tape (which is minimal now)
• marketing campaigns to raise awareness of their existance (they are even advertising on facebook (see graphic) for heaven’s sake!)
• provision of support and hand holding to compose business plans and submit applications at local and regional levels
• huge relaxation of  eligibility and even sectoral criteria (see Tourism Development)

So what are the problems? Well, the main obstacles appear to be that -

• Banks will not provide match funding for even the best and most viable projects. This means that projects may be fully approved but cannot proceed because, in the current climate, match funding cannot be raised by borrowing. Banks are using the Catch 22 that a business has to be ‘viable’ before it will lend and the very act of asking for match funding means that the business must be ‘non-viable’ – therefore they won’t lend. Brilliant!
• Even after approval has been given, many projects, small and large, are failing to take or spend the money leaving large amounts of allocated funds in limbo.
• “You can take a horse to water but not make it drink” syndrome in Welsh private sector. Once burned twice shy Welsh businesses are not bothering to apply in the first place citing reasons such ‘ it’s not worth the candle’ or ‘too much hassle’ or ‘too much planning’. Any reason or excuse is given because there is a perception that getting a grant is a two-edged sword, a poisoned chalice or any other well-worn cliché you care to come up with . The belief and trust has gone completely. Even start-ups by kiddies with no experience are wary as hell. All those expressions of interest and application forms just go straight in the bin.
• Service providers and contractors appear to be doubling or even trebling their prices if it is suspected that a grant has been applied for – therefore it’s not going to save the business any money – in fact it just causes delay, paperwork and grief with the distinct probability that a large investment of time and effort could go down the drain if the project is rejected or the bid for a tender fails. This is endemic to the current public sector procurement system. Basically, many private sector businesses just ‘don’t want to know’ when it comes to dealing with WG, Finance Wales, or County Council and these are the only channels through which these huge funds can be dispersed.

Therefore, should the blame really be laid at the door of private sector business  in Wales which has rightly or wrongly been accused of  being ‘non-entrepreneurial’ and lacking in aspiration!! (Gasp!)? Whatever the reasons, it appears that very significant amounts of  funding may be going to waste (and will go back to source). If this were Ireland, France, Greece or any other EU country this money would have disappeared in a flash. If Wales has any aspiration at all to be self governing and in charge of its own economic destiny then surely we need to be smarter and quicker to get these funds under the mattress before the Euro collapses and this money is clawed back to give to the ‘bankers’ in interest payments. N’est pas?